NCPO caps diesel, LPG price as part of 30 urgent economic plans

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NCPO caps diesel, LPG price as part of 30 urgent economic plans
Erich Parpart
The Nation

BANGKOK: -- The National Council for Peace and Order (NCPO) yesterday agreed on capping the diesel fuel and LPG price in a bid to help relieve people's burdens, until the oil price structure is reformed.

This was among 30 immediate plans to drive the country's economy forward. Among other plans, the junta emphasised including a framework of 10 long-term issues, financial restrictions, restoring the confidence of the country and aiming to become a leader in Asean.

After a four-hour meeting with high-ranking state officials, Air Chief Marshal Prajin Juntong, the junta's economic chief, revealed that the NCPO chief General Prayuth Chan-ocha wanted to maintain the price of diesel for 30 days and liquefied petroleum gas (LPG) at Saturday's price of Bt22.60 per kilogram until there were further discussions on the reform of the oil and gas price structure.

He said reform of the tax structure would be discussed later with the Finance Ministry next week. Value-added tax (VAT) would be maintained at 7 per cent for one more year.

The 30 urgent economic issues discussed yesterday aim to solve before the end of June issues related to financial institutions, residential areas, and strategic issues.

The junta's economic chief revealed that 30 urgent issues have been categorised into 10 economic policies, which include:

1 Spending will not exceed the initial budget, to maintain financial discipline, and prevent increasing public debt;

2 Revive the confidence of foreign and domestic investors;

3 Proceed with delayed projects under the 2014 budget;

4 Projects that have legality issues will be reprioritised based on their importance to the economy;

5 Consider special projects such as promotion of border trade for small and

medium enterprises;

6 The economic plans will adhere to rules and regulations of financial discipline, the capital market and registered companies;

7 Set up a private fund to lower public investment;

8 Modernisation of state enterprises;

9 Achieve energy stability;

10 Economic plans will be based on transparency.

The tangible goals of the economic roadmap are to achieve financial discipline, promote renewable energy, develop basic infrastructure and become one of the leaders in the Asean community.

-- The Nation 2014-06-02

[UbonRatch]

Good Lord! This lot has got its head screwed on more than any Government I've experienced in the last 12 years... be it party led or Military led.

Way to go boys!!

[Stradavarius37]

Coup or no coup - these guys are seemingly the only ones trying to fix the problems of the damn country. I wish them well!

[ezzra]

Sure, looks good on paper, words are cheap and the road to hell paved with good intentions,

meanwhile, price of goods in the market place are going up... so let's wait and see, I for one,

will support ant body how can stop the madness and get Thailand back on a peaceful road...

[GoodThaiGirl]

what ever side you support.doesnt matter,who can honestly disagree with these implimentations for thailand,,even with free speech restored you would be a brave person to argue these ..points...or just a troll.....

[dude123]

What is the diesel/litre price in Thailand now?

[PattayaPhom]

Things getting done properly.....amazing what difference 10 days can make. Certainly addressing major important issues with resolutions souaht by Somchai Public. Keep up the good work.

[just_another_guy]

What is the diesel/litre price in Thailand now?

about 30 baht per liter

http://www.shell.co.th/en/products-services/on-the-road/fuels/shell-fuel-prices.html

[dude123]

What is the diesel/litre price in Thailand now?

about 30 baht per liter

http://www.shell.co.th/en/products-services/on-the-road/fuels/shell-fuel-prices.html

Thanks! I always wonder how working Thai people can afford gas prices so high compared to their average salaries.

[englishoak]

Brave manifesto and wishes, realistic or unrealistic ? doable or not ? solutions lasting or flawed ?

Wants and words are great n all that but its actually implementing how and the results that count.

Good luck delivering all that effectively is all I can say.

[Local Drunk]

I rather like #8... It reminds me a bit of "Have you got a 27B - 6?"

[chainarong]

I would think twice about capping Diesel and LPG or any power charges, on pricing parity, the government will need to pay the difference in the price , Thaskin did this in 04 and nearly bankrupted the country, the treasury ended up nearly broke, it all sounds good on paper but when you have to go back to the world price, the transport industry is the first hit with massive increases, as happened with Khun Thaskin , Buss and Trucking companies went to the wall, the same if you freeze prices, eventually you need to come back to reality ,ask the people of Western Australia and the increases in power chargers , after four years frozen, something in the order of 150% increase all up.

[CBR250]

I would think twice about capping Diesel and LPG or any power charges, on pricing parity, the government will need to pay the difference in the price , Thaskin did this in 04 and nearly bankrupted the country, the treasury ended up nearly broke, it all sounds good on paper but when you have to go back to the world price, the transport industry is the first hit with massive increases, as happened with Khun Thaskin , Buss and Trucking companies went to the wall, the same if you freeze prices, eventually you need to come back to reality ,ask the people of Western Australia and the increases in power chargers , after four years frozen, something in the order of 150% increase all up.

Happy to be corrected, but I believe that the low diesel price is NOT the result of any subsidy that will drain government coffers. Rather, it results from the government not collecting fuel tax on diesel, as it does on petrol.

[Carib]

One day the "real" price will have to be paid, the markup will then be substantial, and someone will have to absorb the difference now.

[lomatopo]

Good Lord! This lot has got its head screwed on more than any Government I've experienced in the last 12 years... be it party led or Military led.

Way to go boys!!

You do realize that this is a list?

Two stand out:

3 Proceed with delayed projects under the 2014 budget;

so proceed with what the previous government approved.

8 Modernisation of state enterprises;

good luck with this one.

Happy to be corrected, but I believe that the low diesel price is NOT the result of any subsidy that will drain government coffers. Rather, it results from the government not collecting fuel tax on diesel, as it does on petrol.

Partially correct in that yes, there is a significant decrease in tax revenue, and consumption/traffic/pollution all increase.

Maybe just give free beer to everyone?

Just two days ago the "Government" announced an increase in LPG prices, evidently that didn't last long? Head screwed on, easily screwed off.

A re-jig of fuel prices - including liquefied petroleum gas, natural gas for vehicles and diesel - is an urgent matter, so the Energy Ministry will go ahead with a plan to increase LPG prices, which have to be raised by another Bt0.50 per kilogram this Sunday, from Bt22.63 at present.

This was announced by Air Chief Marshal Prajin Juntong, the junta's chief of economic affairs, after talks with Energy Ministry officials yesterday.

[tim armstrong]

Yes I think the diesel cap will be a short term measure, as like the rice scheme, this administration knows what a long term subsidy could do, and it is a bit more realistic about priorities.

[h90]

I would think twice about capping Diesel and LPG or any power charges, on pricing parity, the government will need to pay the difference in the price , Thaskin did this in 04 and nearly bankrupted the country, the treasury ended up nearly broke, it all sounds good on paper but when you have to go back to the world price, the transport industry is the first hit with massive increases, as happened with Khun Thaskin , Buss and Trucking companies went to the wall, the same if you freeze prices, eventually you need to come back to reality ,ask the people of Western Australia and the increases in power chargers , after four years frozen, something in the order of 150% increase all up.

Well Thailand has gas and oil and PTT is 51 % state owned. They can just order PTT to reduce the price. There were lot discussions that the Shinawatras have their fingers in the oil business and that Thailand is selling its oil while buying oil over a broker from Saudi Arabia.

They should look into the contracts and just change them were they suspect corruption. (They can do it easily while there is no constitution).

[kerrysum]

I guess it is a good idea to kill an economy......

Let us face it ... Kill the economy of hard working, for those whom only say it will cost more.... No wonder the natives are restless......

Basic sense must come into rule here, well don't ya think? Good job Thaksin.... The people suffer, but hey, whom gives a sh**?

Me for me and mine......

[cloudhopper]

Well well it appears that the junta has just embraced populism.

[Lunchbob]

This is wonderful. 3 cheers for these good intentions. Let's do everything we can to support these positive goals.

[rreddin]

I would think twice about capping Diesel and LPG or any power charges, on pricing parity, the government will need to pay the difference in the price , Thaskin did this in 04 and nearly bankrupted the country, the treasury ended up nearly broke, it all sounds good on paper but when you have to go back to the world price, the transport industry is the first hit with massive increases, as happened with Khun Thaskin , Buss and Trucking companies went to the wall, the same if you freeze prices, eventually you need to come back to reality ,ask the people of Western Australia and the increases in power chargers , after four years frozen, something in the order of 150% increase all up.

Happy to be corrected, but I believe that the low diesel price is NOT the result of any subsidy that will drain government coffers. Rather, it results from the government not collecting fuel tax on diesel, as it does on petrol.

Somebody is going to have to pay the cost of capping the price of diesel and LPG. It could be done through increasing taxes on gasoline and or increasing the vehicle excise duty. The latter is more equitable - but the VEL should be paid for every vehicle including tuk-tuks.

[bigbamboo]

Well well it appears that the junta has just embraced populism.

They've certainly embraced reality.

And that is making them increasingly popular.

[lomatopo]

Thailand's Oil Fund administrator says LPG, diesel subsidies should be scrapped

Bangkok (Platts)--30Dec2013/442 am EST/942 GMT

Thailand's retail subsidies for diesel and LPG are coming under increased pressure and should be scrapped, the director of the country's Energy Fund Administration Institute said last week.

The subsidies as they currently stand are a "time bomb if you keep them going," said Chainoi Puenkosum, who heads EFAI, an "independent public organization" under the Energy Ministry that manages the receipts and payments of the country's Oil Fund, from which the subsidies are paid.

Subsidies are costing the country Baht 165 million/day ($5 million/day) at current levels, according to the EFAI. The subsidies keep diesel pump prices under Baht 30/liter, well below international prices, and LPG at staggered rates that are as low as one-third of international prices.

http://www.platts.com/latest-news/oil/bangkok/thailands-oil-fund-administrator-says-lpg-diesel-27779021

Hopefully Junta economic supremo Air Chief Marshall Prajin Juntong has enough bandwidth to continue his other roles including chairman of the Thai Airways board, and the PTT board. How long did it them to find that MH 370 radar information?

Personally I might trust Air Marshall FooFoo with the economy before an Air Force General, but you takes what you gets I guess?

[cloudhopper]

Well well it appears that the junta has just embraced populism.

They've certainly embraced reality.

And that is making them increasingly popular.

Manipulating market prices is the opposite of reality. Of course it will make them more popular - hence the name of the strategy. It's a page right out of the Thaksin playbook. But the damage to the economy is the same regardless of the regime that employs it.

[bigbamboo]

Well well it appears that the junta has just embraced populism.

They've certainly embraced reality.

And that is making them increasingly popular.

Manipulating market prices is the opposite of reality. Of course it will make them more popular - hence the name of the strategy. It's a page right out of the Thaksin playbook. But the damage to the economy is the same regardless of the regime that employs it.

Short term subsidy is not the same as manipulating market prices.

[Chris Lawrence]

Another subsidy scheme on merit should loose some money?

Being popular is what got Mr T in trouble.

Congradulations to Air Chief Marshal Prajin Juntong, being elected as Chairperson of THAI Airways board; and is an independent Director of PTT public Company an oil and coal company in Thailand and Internationally. This wouldn't be a conflict of interest?

[Pib]

I would think twice about capping Diesel and LPG or any power charges, on pricing parity, the government will need to pay the difference in the price , Thaskin did this in 04 and nearly bankrupted the country, the treasury ended up nearly broke, it all sounds good on paper but when you have to go back to the world price, the transport industry is the first hit with massive increases, as happened with Khun Thaskin , Buss and Trucking companies went to the wall, the same if you freeze prices, eventually you need to come back to reality ,ask the people of Western Australia and the increases in power chargers , after four years frozen, something in the order of 150% increase all up.

Happy to be corrected, but I believe that the low diesel price is NOT the result of any subsidy that will drain government coffers. Rather, it results from the government not collecting fuel tax on diesel, as it does on petrol.

I think you are correct...the govt is just not collecting the full amount of tariff/tax on diesel. I read a news article about six months ago which talked about it. In a round about way it's kinda like the VAT which is suppose to be 10% but the govt has waived/reduced the tax to only 7% for years.

[Gonsalviz]

What is the diesel/litre price in Thailand now?

about 30 baht per liter

http://www.shell.co.th/en/products-services/on-the-road/fuels/shell-fuel-prices.html

30.60ish in Isan.

[Gonsalviz]

I would think twice about capping Diesel and LPG or any power charges, on pricing parity, the government will need to pay the difference in the price , Thaskin did this in 04 and nearly bankrupted the country, the treasury ended up nearly broke, it all sounds good on paper but when you have to go back to the world price, the transport industry is the first hit with massive increases, as happened with Khun Thaskin , Buss and Trucking companies went to the wall, the same if you freeze prices, eventually you need to come back to reality ,ask the people of Western Australia and the increases in power chargers , after four years frozen, something in the order of 150% increase all up.

Well Thailand has gas and oil and PTT is 51 % state owned. They can just order PTT to reduce the price. There were lot discussions that the Shinawatras have their fingers in the oil business and that Thailand is selling its oil while buying oil over a broker from Saudi Arabia.

They should look into the contracts and just change them were they suspect corruption. (They can do it easily while there is no constitution).

Paranoia is not always a good thing.

[DrTuner]

I think Thailand should start exporting it's model of governing. Having the Army clean after the screwups every few years should be mandatory.